China's Investment In Africa - The African Perspective - Forbes (
JOHANNESBURG – China’s interest in Africa is often said to come on
the back of colonial aspirations. Newspaper headlines scream that
Chinese firms, backed by the powerful and deep-pocketed Chinese state,
will mop-up Africa’s business opportunities to the detriment of Western
and indigenous firms. Given these developments, is it possible for
Africa to benefit from increasing Chinese investments in Africa?
While it is easy to conclude that China is taking over and
‘colonizing’ Africa when one sees ‘Made in China’ goods in every African
marketplace and Chinese construction crews on seemingly every
construction site, it is easy to forget that Chinese goods and labor are
able to entering the African marketplace amicably, rather than the
historical model by which Beijing would be sailing a warship up to the
coast and forcing African governments to accept trade.

In fact, Chinese
goods and companies are possible in Africa because WTO efforts over the
past two decades have decreased trade tariffs and opened up the African
marketplace. Ironically, therefore, it is not a ‘colonialist’ China, but
the WTO that set the playing field for Africa as an attractive
opportunity for China.
During his visit to the African Union in 2014, Chinese Premier Li
Keqiang announced that China expects to achieve $400 billion in trade
volumes with Africa and raise its direct investment in the continent to
$100 billion by 2020. China’s investments will be mainly in
infrastructure development and be channeled through various Chinese
lending agencies, including the newly established BRICS Bank.

Such a
sustained injection of investment capital from China is bound to create
opportunities in all sectors.
Africa’s price-sensitive marketplace, telecommunications
infrastructure, for example, has become very reliant upon Chinese
technology, which is competitively priced, durable and enjoys strong
back-up service compared to its Western competitors. Similarly, Chinese
construction companies are able to overcome difficulties and deliver
roads and bridges on budgets that cannot be matched by Western or even
local companies. Chinese companies, however, do not always get it right.
The Chinese commerce ministry estimates that 65% of Chinese foreign
direct investments make a loss; compared with a 50% international norm.
Chinese companies have only begun to venture overseas.

Beijing declared
“go-out” state-policy in 2000, and most Chinese companies are still in
the steep learning curve of learning to operating in a foreign,
international environment.
What is often ignored when the media portrays the Chinese as a new
colonial power in Africa is how much China needs Africa. As a growing
economy, China needs African energy, resources and access to African
markets. As a rising power, China needs the political support of African
leaders as bulwark against the West.

From Africa’s perspective,
Chinese investment – especially in basic infrastructure – is more than
welcomed. It is estimated that Africa suffers from a $900 billion
infrastructure deficit: without potable water, all-weather roads,
adequate power and reliable communication, African economies cannot
thrive. China’s focus on basic infrastructure investment will lay the
groundwork for children to be able to go to school and businesses to
trade. But China’s arrival will bring challenges.

‘Made in China’
products over the past two decades have had a devastating effect on
local manufacturing....continue reading....

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